No wonder people think that they can’t file bankruptcy under the new law. It has been almost two years since the new law went into effect, and our most reputable news sources still aren’t getting the story straight.

NPR aired a show on July 09, 2007 Let’s return rewards to risk takers on the negative impact that the more difficult Chapter 7 bankruptcy laws are having on small businesses. The point being made on the show was a good one: that removing the safety net of Chapter 7 discourages people from taking the risk to start a new business. But the commentator also stated that people who make more than the median income can not file for Chapter 7 anymore, which is simply not true.

If someone makes above median income and they wish to file for Chapter 7 bankruptcy then they must take a means test. The means test is the starting point of Chapter 7 bankruptcy case under the new law. The test is the first step in determining if someone can file for Chapter 7 if they earn above median income. Once they take the test, the numbers will be used to determine if a presumption arises that someone is capable of paying back some or all of their debts. Many people who are above median still pass the test, and therefore are able to file for Chapter 7.

Concentrating in Consumer Bankruptcy Law since 1988;
Wake Forest Law School JD 1987
Law Office of Susanne M. Robicsek since 1993,
Law Clerk to Judge Rufus Reynolds, US Bankruptcy Judge for Middle District of NC; Burns Price & Arneke, PA, David Badger and Associates, PA.